Mstrat student submit evidence to Parliament on Iran

The UK Parliament Commons Select Committee launched on 2 December 2013 its inquiry on “UK Policy Towards Iran”. Falling in line with the focus of one of the Mstrat student inquiry groups as part of the Crisis Watch module, two of our students submitted evidence to this inquiry in January.

The evidence submitted by Mal Craghill and Nicholas Wood can be found at the following url: http://www.parliament.uk/business/committees/committees-a-z/commons-select/foreign-affairs-committee/inquiries1/parliament-2010/iran-2014/?type=Written#pnlPublicationFilter

Evidence was also submitted by an Exeter PhD candidate, Morgane Colleau, who is supervised by SSI’s Director of Research, Professor Gareth Stansfield. Her evidence can also be found in the link above.

Rouhani’s new Iran: carefully navigating Iran’s near neighbours, by Thomas Owen – Crisis Watch: Iran

The first day of 2014 saw snow fall in the Iranian capital Tehran, an apt

reflection of the cold reception that greeted news of the historic agreement

reached in Geneva on November 24th. As president Hassan Rouhani

celebrated his first one hundred days in office, a hundred days that were

perhaps more productive than that of US president Barak Obama’s, he still

faces an uphill struggle to convince his near neighbours that both he, and

Iran, are not to be feared.

This deal has brought about sudden turn of events that has seen the status

quo in the Middle East suddenly shift far faster than many leaders would

have liked, and while the developed world celebrated an apparent thawing in

diplomatic relations with Iran, the temperature that has settled over Tehran is

similar to the coolness Iran’s neighbours are treating them with.

Saudi Arabia and Israeli, two of the most unlikely bedfellows have

nevertheless crawled under the blanket of security, providing them, no

doubt, with the warming reassurance of alliance and mutual interest in

keeping an ascendent Iran in check. Rightly this has shivers running down

the spine of many in Washington, London, Brussels and Tehran, particularly

considering Israel is the region’s sole nuclear power and Saudi Arabia, it has

been rumoured, has had secret dealings with Pakistan that involve funding

Pakistan’s nuclear programme in exchange for rapid access to nuclear

weapons. If these rumours prove true, it could make Iran and Rouhani think

long and hard about their current dismissal of a nuclear weapons programme.

With this unease generated by Israel and Saudi Arabia, the war in Syria is

most certainly an unwanted distraction, with Iran heavily involved in

supporting and financing the Assad regime and various factions operating

within Syria’s borders such as Hezbollah. This support of groups identified

by the West as terrorist organisations is still a big stumbling block on the road

to reconciliation, particularly with countries like Israel.

The news isn’t all bad, as it was Oman, one of Britain’s strongest allies in

the Middle East, who originally brokered the first tentative meetings between

Iran and the USA. The Gulf States’ cooperation is high on the list of priorities

for Iran’s Foreign Minister Mohammad Javad Zarif, as he said on his

Facebook Page that “Iran’s ties with the Persian Gulf littoral states will get

better day by day, and we will try to have these relations upgraded to the

highest level.” For their part the Gulf States are nervous of an ascendent Iran.

The US’s attempt at reconciliation, combined with its desire to be self

sufficient in its ability to access oil and natural gas put the Gulf States in a

tricky situation. Turki bin Faisal al Saud, member of the Saudi royal family

and former head of Saudi intelligence has warned that US-Iran relations

should galvanise the Cooperation Council for the Arab States of the Gulf

(GCC) to form a “unit” that does more than cooperation on economic matters

and the price of oil. This sentiment was echoed by the Saudi deputy Foreign

Minister, Nizar Madani, who said “the Gulf states should no longer work

independently from one another to guarantee their security.” The GCC does

welcome a nuclear deal, as it diminished the threat of an Israeli-US military

strike on Iran. Being excluded from the negations however, was not

welcomed.

The real reason for the GCC’s unease, says Omar al Hassan, director of

the Gulf Centre for Strategic Studies, is the potential for Iran to use its new

found peace with the West to forge a place as a Middle Eastern superpower

that would use its influence in Syria and Iraq to try to control the region. Al

Hassan reckons this is where the GCC should come together to counter any

power grabs Iran may have planned.

In all, the deal brokered on 24th of November will have a positive impact

on the regional dynamics of the Gulf. The GCC feel let down by America for

not intervening in Syria, and will likely grow closer as time goes on. Iran can

use this closeness to its advantage, by extending trade deals (which will be

limited given US and UN sanctions) to both the GCC, and to its existing

allies such as China and Russia. Syria will play a huge role in deciding the

balance of power in the region, and if the US continues to bring Iran in as a

powerful ally in the war against al-Qaeda and Sunni extremism, then Iran

could have the upper hand in securing influence in the future of Syria. The

relationship between Iran and her neighbours is complex, with mistrust

stretching back to the days of the Shah and Iran’s previous attempts at

becoming a regional superpower. As Spring comes to Iran and the snow

melts, it is likely that the thaw will continue in the relationship Iran has with

both its neighbours and the outside world.

The interim agreement: regional considerations, by Rafael Serrano – Crisis Watch: Iran

Beyond the issues surrounding the Iranian nuclear development program there is a larger struggle for regional power and influence. This struggle has pit traditional Gulf powers, led by Saudi Arabia, the Israelis, and the Iranians in a regional race for influence and leverage against one another. The divisions between these regional powers are influenced by deep political, cultural, and religious divisions. While the majority of the headlines and commentary have focused on the threats exchanged between the Israelis and Iranians, the Gulf States have also been actively and aggressively engaged in countering Iran at every opportunity. The recent international negotiations regarding Iran’s proposed nuclear weapons program have had a profound effect on the dynamic between the rivals with significant implications going forward.

There is an ongoing proxy war between the regional powers that could have serious impact of the possible success of any nuclear negotiations between Iran and major foreign powers. Understanding the significance of the proposed international deal to stem the Iranian nuclear weapons program requires an appreciation of the strategic environment. There is a broader and more complex strategic environment from within which the actions and counteractions regarding the Iranian nuclear development program are continuing to develop of which the nuclear issue is just one feature. This environment has a complex network of regional stakeholders and is significantly influenced by deep historical, cultural and religious dimensions. It is within landscape and through the prism of the regional geopolitical dynamic that the impact of any negotiations or actions must be analyzed.

The Saudis and Gulf States

The divisions between the Saudi and the Iranian regimes have the deepest and most complex origins and narratives in the region. These divisions have manifested themselves in a series of ongoing bloody sectarian battles throughout the region including in Yemen, Iraq, Lebanon, and Syria. These proxy wars have been fought by patchwork network of extremist organizations and Islamist militants to counteract one another. Whereas, the Saudis have also previously been able to rely on their interest more succinctly aligning with those of the US, they have perceived this to increasingly not be the case. The Saudi’s have been increasingly critical of western positions, especially those of the US, on Syria and Iran. This has led to increased sectarian proxy wars carried out by sub-state and non-state actors leading to assassination attempts, bombings, and arming sectarian militias.

The Saudi’s were further rebuffed when their demands for a seat at P5+1 nuclear negotiation were rebuffed. The apparent Saudi loss of strategic ground in the power politics of the region has led to the creation of a new alliance with the Israelis. While the Saudis had previously expressed support for Israeli direct action against Iran, these sentiments were always shared with the US as the intermediary. However, this new alliance may be a move to ensure Saudi interests are promoted without a reliance on direct US involvement, especially as they pertain to Iran.

The Israelis

The Israelis have been very clear regarding their positions on political and security matters throughout the region, especially regarding the Iranian nuclear program. They have long reiterated their unwillingness to have any nuclear capacity in Iran and reserved their right to strike if necessary. As with the Saudis, the Israelis have also been publicly opposed to the ongoing negotiations with Iran and are increasingly critical of western involvement, or lack thereof, in the region. The Israeli stance has been challenged directly with Iranian demands for disarmament of all regional powers in negotiations which may explain the new Saudi-Israeli alliance.

The emergence of an alliance, even if just against Iran, could have serious implications for the region. As international negotiations with Iran have progressed the Israeli government has found itself increasingly on the outside. This Israeli security dilemma has been coupled with the increasing instability on its borders in Lebanon and Syria. Additionally, Israel has had to navigate a good but changing relationship with Turkey which has recently adopted a more hard-line stance on regional issues.

The Turkish

In recent years the geopolitical dynamic has been further complicated by the reemergence of Turkey as an active participant in the regional security and political affairs of the Middle East. The legacy of the Ottoman Empire provides Turkey with a powerful legitimizing narrative to support greater regional involvement. Turkey has launched into regional affairs with noticeably differing objectives which have put them at odds with Saudi and other Gulf States. In fact, the Turks have taken a far more aggressive and strategic approach to relations with Saudi Arabia and Israel. However

In the past year the Turkish government has taken actions in direct opposition to the interests of Iran, Saudi Arabia, and Israel. The Turkish government expelled Saudi intelligence officials from Turkey and allegedly reported a number of Israeli intelligence assets in Turkey to Iranian officials, resulting in a significant loss to both countries. Moreover, Turkey has openly opposed Saudi positions in Egypt and Syria increasing tensions the two countries. These actions are in addition to Turkey’s more aggressive approaches towards Palestinian territories in Israel. Turkey’s relationship with Iran has been mixed but far better than that of Saudi and Israel. The significance of Turkey’s newfound position was best captured in the inclusion of President Erdogan in President Obama’s top five international leader friends; a list which excluded both Israeli Prime Minister Benjamin Netanyahu and Saudi Arabia’s King Abdullah.

The Strategic Implications

The international community has thus far largely failed to fully appreciate the complexities and nuances of the geopolitical dynamic in the region in negotiating the Iranian nuclear deal. The struggle for regional power and influence in the Middle East is an inescapable reality that has direct bearing over the ongoing nuclear negotiations. As such, there are several possible reactions to the P5+1 negotiation that western powers would be wise to monitor. First, if proxy warfare is allowed to escalate, groups like the Al Qaeda-linked Islamic State of Iraq and the Levant in Syria could increase the threat of international terrorist in the region. Additionally, any unilateral actions on the part of Israel could potentially plunge the region in a far larger conflict.

In attempting to find a peaceful solution to the Iranian nuclear issue foreign powers should be wary of the implications to regional power balance. This is especially true since geopolitics in the region between the primary actors is often seen as a zero sum game. Moreover, while the reemergence of Turkey as a prominent geopolitical entity can possibly provide much needed balance, western powers should appreciate that all the regional powers will ultimately act according to its own strategic interests. In such a complex environment there is as much potential for negative outcomes as positive.

The interim agreement: unresolved issues, by Nick Wood – Crisis Watch: Iran

Whilst the interim agreement that was reached on the 24th November between the P5+1 and Iran saw embraces and smiles from the negotiating teams, the hard work is only just beginning. The 9th December saw negotiations commence once again in an attempt to agree upon the technical details not discussed in the 24th November agreement. The talks are taking place at the International Atomic Energy Agency (IAEA) headquarters in Vienna, a suitable location considering the key role the organisation will play in monitoring Iran’s compliance when the final agreement is implemented – possibly as early as January.

 

An agreement between Iranian nuclear officials and the IAEA on the 11th November saw Iran allow the UN nuclear watchdog access to both the Gachin uranium mine and the heavy water facility at Arak. The latter had been a particular sticking point after Iran refused to adhere to a UN Security Council Resolution demanding cessation of work related to heavy water projects in 2006, with Iran maintaining that it was under no legal obligation to halt activity. The one-day visit to the facility by a two-member IAEA team on 8th December signalled the first inspection since 2011. Whilst the Geneva interim agreement stated that Iran would make no further advances in its activities at the Arak reactor, Foreign Minister Mohammed Javad Zarif announced to Iran’s Press TV, just five days after the agreement had been reached, that although ‘capacity at the Arak site is not going to increase…construction will continue there.’ It is varying interpretations of what the interim does and does not allow that must be clarified in the current technical negotiations. Claims, for example, that the nuclear agreement includes loopholes that could allow for the production of specific nuclear-related components off-site, suggest that certain aspects of the deal still need to be clarified.

 

Another controversial aspect of the Geneva interim agreement is the lack of reference made to the Parchin military complex. A report released by the IAEA in November 2011 announced that it had received information from member states that suggested Iran constructed a large explosives containment chamber in 2000 and had been carrying out subsequent testing, possibly associated with nuclear materials – a charge that Iran denies. Whilst the IAEA’s visits in 2005 uncovered nothing of relevance, the UN watchdog maintained that Iran had yet to ‘explain the rationale behind these activities.’ Though Iran has argued in the past that the military sensitivity of the complex means that detailed inspections are not appropriate, there are hopes amongst U.S officials that further negotiations might break the impasse that Parchin has historically presented and allow a deal to be struck that could eventually permit future access.

 

Perhaps a more pressing issue concerns the practicalities of the IAEA’s expansion of monitoring in order to observe Iranian compliance with a final deal. The organisation’s Director-General Yukiya Amano announced on Thursday 28th November that the monitoring of the Iranian deal would have ‘implications for funding and staffing’ that would require an increased budget. Around 10% of the IAEA’s annual inspections budget of €121m is already used to monitor the Iranian nuclear program. The interim agreement and its subsequent technical additions will vastly increase the IAEA’s workload, requiring extra support, funding and time.

 

The 24th November interim agreement was certainly a breakthrough for both Iran and the P5+1. Putting the words to paper took much time and effort, but their implementation will require even more determination. The technical negotiations must clarify what exactly constitutes compliance if questions over facilities such as Parchin or loopholes over Arak are to be effectively addressed. The P5+1, Iran and the IAEA all have a difficult time ahead of them – the success of any deal will be measured ‘in months and years, not minutes.’

The path to an interim nuclear deal – by Mal Craghill, Crisis Watch: Iran

In the early hours of Sunday 24th November the foreign ministers of Iran and the “P5+1” group – China, France, Germany, Russia, UK and USA – agreed an interim Joint Plan of Action on solving the long crisis of Iran’s nuclear programme. The talks, led by the EU’s High Representative for Foreign Affairs and Security Policy, Baroness Catherine Ashton, had been significantly aided by secret Omani-brokered talks between Iran and the USA since Hassan Rouhani’s surprise election as President of Iran in June, as well as talks between Iran and the UN’s International Atomic Energy Agency (IAEA) which had been taking place separately from the P5+1 talks. An earlier set of Geneva talks, which had seemed likely to result in a breakthrough, had broken up with no agreement on 9th November after France allegedly held out for a tougher interim settlement, much to the delight of the Israeli Prime Minister Binyamin Netanyahu. Just two days later Iran reached agreement with the IAEA over access to the Arak nuclear reactor and the Gachin uranium mine, and on the same day the UK and Iran announced that they would be re-opening diplomatic relations – suspended after the British Embassy in Tehran was attacked in 2011 – with the exchange of non-resident charges d’affaires. On 17th November France’s President Hollande arrived in Israel for a previously scheduled visit and announced that France would continue to hold out against the easing of sanctions on Iran until it was convinced Iran was not pursuing a nuclear weapons programme. It was against this backdrop – and the bombing of the Iranian Embassy in Beirut on 19th November – that the Geneva talks re-convened. With expectations lowered following the previous round of talks, the talks were at “official” rather than ministerial level, and whilst they were underway Binyamin Netanyahu engaged in a frantic round of visits trying to forestall an agreement, including visiting Russian President Putin in Moscow on 20th November and meeting with John Kerry in Israel on 22nd November. This proved fruitless for Netanyahu, with good progress evident in Geneva as the P5+1 foreign ministers converged on Geneva on Saturday. Despite a long wrangle over the details of one or two points, a deal was eventually struck in the early hours of 24th November, with all sides claiming victory for their negotiating standpoints. But as the dust settles from Geneva, what does the agreement mean for Iran’s prospects over the next 6-12 months, and for the UK’s engagement with Iran? A series of blog posts from the Iran Crisis Watch group will investigate prospects for Iran over the coming months.

 

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The Prospects for Trade 

The Joint Plan of Action allowed for a limited easing of sanctions against Iran which may aid Iran’s ailing economy in limited ways. It puts a hold on efforts to further reduce Iran’s crude oil sales – which have dropped from around 2.5m barrels per day to 1m barrels per day – and allows Iran’s crude oil customers to maintain their current levels of supply. Sanctions on the automotive sector, petrochemicals and precious metal exports are suspended, and a channel is opened for humanitarian aid which will include food and agricultural products as well as medical and pharmaceutical supplies. The effect on trading partners has been surprisingly rapid, although the temporary nature of the current deal has led many to approach potential trade deals with caution.

 

One immediate beneficiary is likely to be India. Given its fragile relations with Pakistan, India has been involved in work to build a deep water port at Chabahar in Iran, which it views as an essential route for Indian trade into Iran and Central Asia. Illustrating the region’s difficult geopolitical situation, Chabahar would be in direct competition for international trade with the Chinese-financed Gwadar port, just 44 miles away in Pakistan. Iran has announced its intention to establish a free trade zone around the port, probably to attract lost trade back to the country; the port of Bandar Abbas is reportedly handling almost half of the trade now that it was two years ago. The announcement of the free trade zone already seems to be creating interest, with several Gulf States keen to invest. Japan also seems keen to rekindle trade with Iran, with talks having taken place in Tehran recently.

 

A number of opportunities arise for European trade with Iran, which will be highly beneficial for many stagnant European economies; EU exports to Iran are down 45% (3.4Bn euros) in the first 9 months of 2013 compared with the same period in 2011. France will be keen to re-kindle Peugeot and Renault’s previous exports to the Iranian automotive sector, although it remains to be seen whether their reported intransigence in Geneva will be held against them. Iran has also begun reaching out to oil companies that it would like to see re-entering the market, going as far as naming the companies it wants to do business with – including two from the USA, and Britain’s BP. Italian company Eni has been the first to show signs of interest, with its CEO meeting with Iran’s oil minister at the annual OPEC meeting in Vienna on 4th December. This sector is likely to be slow to develop, given the uncertainty over a long-term settlement and the poor terms under which Iran dealt with foreign oil companies in the past. An Austrian trade delegation visited Tehran in early December, reportedly focusing on infrastructure and manufacturing opportunities. Pakistan is also using the recent international developments to reinvigorate a stalled project to construct a gas pipeline from Iran into central Asia, despite opposition from the USA. Although Iran is keen to progress this project, their recent cancellation of finance for the Pakistan side of the pipeline reflects Rouhani’s pragmatism, showing a desire to fix Iran’s ailing economy structurally as well as through increased international trade.

 

Two UK companies stand to benefit immediately, thanks to the humanitarian sanctions relief. GlaxoSmithKlein and AstraZeneca have both maintained trade with Iran during the recent sanctions (reportedly $32.2m and $14m annually, respectively), and they can expect an immediate increase in sales of medicine and medical equipment. Beyond that there are no immediate reports of UK companies seeking new trade in Iran, but over the next 6 months – as work on a permanent agreement with Iran progresses – more interest is likely to be shown. According to the British Iranian Chamber of Commerce, opportunities are likely to lie in telecommunications and IT, joint manufacturing ventures (particularly in vehicle manufacturing), water and waste water projects and banking sector reform. The re-opening of diplomatic relations bodes well for potential future trade deals; Ajay Sharma, the UK charge d’affaires has already visited Tehran, and a reciprocal visit by his counterpart to London has just taken place. William Hague has made it clear that this will be a step-by-step process, rooted in demonstrable trust being developed, but the early signs are promising.

 

There are likely to be some negative aspects to the recent deal as well. With many GCC States believing, at least privately, that steps towards normalisation of Iran’s relations with the outside world will upset the balance of power in the region, it is possible that they will seek to scale down trade with members of the P5+1 group in retaliation. However, a more unexpected result may be to kill off some arms trades in the region. It already seems likely that the UAE will either postpone or cancel a potential Eurofighter Typhoon buy from the UK, citing fears over destabilising the region militarily and with one eye on seeking increased trade with Iran themselves. Oman even went as far as standing in opposition to the other 5 GCC members recently when they called for deepening the partnership into a military alliance. Oman has a strong trading history with Iran, and does not want to harm future relations by joining a potentially threatening regional alliance. For the UK, the real trade benefits will come with the agreement of a permanent settlement to Iran’s nuclear programme, and may necessitate a change of approach to the region, treating the Arab GCC states as individuals rather than as a homogenous bloc.